Jason Waugh – president of Coldwell Banker Affiliates – said employment data remains the most important indicator of housing activity because it reflects household confidence and purchasing power.
“The jobs report, in many ways, is the housing report in disguise,” he said. “Employment conditions ultimately determine consumers’ ability and willingness to buy or sell homes, wages fell by 92,000 in February and unemployment rose to 4.4%, which in itself could help ease the pressure from last week’s high levels.
“However, today’s rate volatility is more influenced by energy markets than employment data. Periods of heightened uncertainty around the world can push mortgage rates into paths that may feel counterproductive to consumers. Markets are not only responding to economic growth; they are responding to the fact that higher energy costs will keep inflation strong and keep interest rates high.”
Still, economists say the housing industry should be cautious about interpreting any single jobs report as a sign of long-term market direction.
Sam Williamson – senior economist at First American Financial – he said monthly labor market statistics tend to contain short-term noise and updates that can distort the broader economic picture.
“Month-to-month fluctuations in employment data can move markets over time, but they are inherently noisy and frequently revised,” he said. “Most importantly, mortgage rates are less influenced by any number of one-year deals and more by the move in the 10-year Treasury yield, which reflects broader financial conditions – particularly inflation expectations and the market’s view of the outlook for monetary policy.
“For that reason, real estate professionals should keep client discussions focused on labor market dynamics around the environment of inflation and mortgage rates, rather than placing too much weight on individual job reports.”
Energy prices and global risk
Apart from employment, political developments including military deployments in the Middle East continue to shake markets – with many subsequent effects on interest rates and other housing issues.
Rising oil prices coupled with global tensions have introduced new uncertainty for investors and homebuyers alike.
Waugh said the key issue for financial markets is whether energy price increases prove temporary or reflect long-term supply disruptions.
“If investors believe that the conflict will cause continued supply disruptions, Treasury yields may rise, and loan rates tend to follow,” he said. “The key question now is whether markets view this as a short-term disruption or a sustained shift that keeps oil prices and bond yields elevated. If sustained, mortgage rates could re-enter the kind of volatility seen over the past few years, slowing progress in reducing the effect of the shutdown.”
Williamson emphasized that global shocks often cause short bursts of volatility in financial markets but do not lead to sustained increases in borrowing costs.
“Political developments can bring short-term fluctuations in energy prices and financial markets, which may make Treasury yields higher,” he said. “In most cases, however, these effects disappear as the initial shock passes and do not translate into upward pressure on interest rates.
“Energy prices become a strong driver only if they remain high enough long enough to raise expectations for broader price increases and keep long-term yields high. Without that persistence, mortgage rates continue to be influenced by the broad accumulation of energy that affects long-term yields.”
Consumer uncertainty
While economists track macroeconomic indicators such as Treasurer product and energy markets, home buyers and sellers obviously focus more on personal financial situations.
Lisa Sturtevant — economist e Bright MLS – he said that uncertainty surrounding jobs, inflation and global conflicts are affecting consumer sentiment in the housing market.
“It is clear that there is a lot of uncertainty in the economy,” he said. “Labor market conditions appear to be weakening.” The conflict in Iran is putting upward pressure on oil prices, prompting new concerns about inflation. While prospective buyers and sellers are looking at economic issues, many are thinking more about their personal circumstances and asking themselves the questions, ‘Is my job secure? ‘Will my family have to cut costs?’ ‘Is this a good time to buy a new house?’
“In this uncertain market, real estate professionals can demonstrate their value by aligning with their clients’ economic concerns rather than focusing on external factors such as energy prices.”
That shift in consumer thinking means housing decisions may depend as much on household confidence as interest rate moves heading into the Spring housing market.
CNBC reported Monday that the Bank of England (BoE) will not go ahead with a planned interest rate cut this month—the center cited the military conflict as a factor.
“BoE cuts are possible in the first half of 2026, but March is off the table and April needs to calm the country’s tensions,” Allan Monks, UK economist JPMorganhe told CNBC. “We are currently delaying the next cut in April, but the risks are already shifting to a longer suspension and a larger impact on growth.”
The idea of inflation and the mortgage
Williamson said a small increase in unemployment alone would not lead to significantly lower borrowing costs.
“A small increase in unemployment, by itself, is unlikely to change the mortgage landscape over the next 6 to 12 months,” he said. “Rates are likely to fall significantly only if labor market conditions worsen enough to signal a broader recession, which will trigger a further flight from safety into the Monetary Union and a change in policy expectations.”
Otherwise, inflation risks are likely to keep long-term yields high, keeping them well below mortgage rates, he said.
“As a result, affordability is more likely to improve gradually – through rising incomes and falling house prices – rather than a sharp drop in borrowing costs,” Williamson said.
A delayed and uneven spring market
The Spring housing market – typically the busiest time of the year for home sales – may slow down this year as buyers and sellers wait for more clarity.
Sturtevant said uncertain prospects for interest rates and the broader economy have led many households to hold off on major housing decisions.
“Both buyers and sellers are holding back during this uncertainty,” he said. “Not only are they waiting for rates to drop, but they’re also waiting for more stability in the mortgage market. As we head into March, we may see a delayed spring housing market as buyers and sellers settle into a holding pattern.”
However, the Spring housing market is unlikely to move uniformly across the country. Local economic conditions will still play a large role in determining how quickly employment rebounds, Sturtevant said.
“Good metrics to look at to gauge the market head of a property include early buyer interest such as home viewings and job showings and job listings,” he said. “The extent to which sellers lower their asking prices, or take their homes off the market when they don’t get the price they want, can also be an indicator of where prices are headed in the local market.”
Waugh said that the current environment requires guidance that remains vigilant about broad action but emphasizes local and personal economic realities.
“This volatility also contributes to the division of the spring market: some buyers re-engage in any price window, while others remain cautious due to uncertainty about the stability of jobs and future monthly payments,” he said. “For mortgage and real estate professionals, this is a time for stable, local guidance.
“Stay focused on what’s happening with tenants in your community, help clients define their budget comfort zone, and take quick action with strategies to lock in the rate and time. Preparation and clarity will put clients in a position to act with confidence.”
For professionals across the real estate industry and their clients alike, navigating the current climate will require patience, careful planning and attention to both national and state economic indicators – as well as what’s happening outside their windows.
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